Ethics Opinion

Opinion 96-1

FLORIDA BAR ETHICS OPINION
OPINION 96-1
October 1, 1996
Advisory ethics opinions are not binding.
An attorney may not unconditionally agree to be responsible for the costs associated with a
client’s litigation. While Rule 4-1.8(e) permits an attorney to advance costs and expenses of
litigation on behalf of a non-indigent client, the rule contemplates repayment of such costs in the
event of a recovery.
RPC:
Opinions:

4-1.8(e)
72-27; Iowa Opinion 93-2, Mississippi Opinion 225; North Carolina Opinion 124

A member of The Florida Bar has requested an advisory ethics opinion on the propriety
of submitting a contract for representation proposal to a State agency in which the attorney
agrees to be responsible for the costs, even if a recovery is obtained. Specifically, the contract
provides, in pertinent part:
Payment for services covered by the resulting contracts will be based on a
contingency fee percentage of the total dollars recovered and reimbursed to the
Agency. Provider shall not separately bill costs, but shall absorb and pay all costs
whatsoever. . . . and
All costs incurred by the contractors in performance under the contracts
will be the responsibility of the contractors. No additional payments will be made
to the contractors to reimburse them for travel expense, filing fees, court cost, or
any other cost. . . .
The contracts resulting from this RFP will be based on a contingency fee
for actual cash recoveries received by the state. The maximum acceptable
contingency fee is 25%. Any proposals with a contingency fee greater than 25%
will be determined nonresponsive by the Agency and will be rejected. All costs
incurred by the contractor(s) in performance under the contract(s) will be the
responsibility of the contractor(s)[.]
Rule 4-1.8(e), Rules Regulating The Florida Bar, is the governing ethical standard:
(e) Financial Assistance to a Client. A lawyer shall not provide financial
assistance to a client in connection with pending or contemplated litigation,
except that:
(1) a lawyer may advance court costs and expenses of litigation, the
repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and
expenses of litigation on behalf of the client.

This rule prohibits an attorney from providing financial assistance to a client in
connection with pending or contemplated litigation. The rule, however, contains an exception
permitting the attorney to advance court costs and expenses of litigation on behalf of a nonindigent client, the repayment of which may be contingent on the outcome of the matter. See,
e.g., Florida Ethics Opinion 72-27; Iowa Opinion 93-2; Mississippi Opinion 225; North Carolina
Opinion 124. Although this exception permits attorney and client to agree that the client’s
repayment of advanced costs and expenses will be contingent on the outcome of the matter, it
clearly contemplates that such repayment will be made if a sufficient recovery is obtained. In
contrast, the inquiring attorney proposes an outright payment of costs for a non-indigent client,
rather than an advancement.
The concerns raised by Rule 4-1.8(e) are that of the common law doctrines of champerty
and maintenance, as well as the conflict of interest created when an attorney has a personal
economic interest in the outcome of the matter. The committee recognizes that the concerns
underlying the rule may be minimized when the client is a state agency, but is constrained to
apply the rule as it is written. Accordingly, the committee concludes that, under the plain
language of Rule 4-1.8(e), it would be ethically impermissible for the inquiring attorney to
unconditionally be responsible for all costs and expenses as provided in the proposed agreement.